articles of association.pdf

7/29/2019 Articles of Association.pdf

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Annexure-D

THE COMPANIES ORDINANCE 1984

[COMPANY LIMITED BY SHARES, CORPORATISED AND DEMUTUALIZED

PURSUANT TO STOCK EXCHANGES (CORPORATISATION,

DEMUTUALIZATION AND INTEGRATION) ACT, 2012]

ARTICLES OF ASSOCIATION

OF

ISLAMABAD STOCK EXCHANGE LIMITED

INTERPRETATION AND DEFINITIONS

1. In these Articles of Associations unless repugnant to the context or meaning thereof:Act means the Stock Exchanges (Corporatisation, Demutualization andIntegration) Act, 2012.

Applicable Law includes the Companies Ordinance, Securities and ExchangeOrdinance, 1969, the Act, the Electronic Transactions Ordinance, the Share CapitalRules and such other laws and rules and regulations, made or to be made under thelaw, as may be applicable to the Exchange from time to time.

Articles means these Articles of Association, as originally framed or as alteredfrom time to time in accordance with applicable law.

Blocked Account means the CDC account opened and maintained by the

Exchange in terms of the Act.

Board means the Board of Directors of the Exchange.

CDC means the Central Depository Company of Pakistan Limited established inpursuance of the Central Depositories Act, 1997 and the Central DepositoryCompanies (Establishment and Regulation) Rules, 1996.

Chairman means the Chairman of the Board appointed from time to timepursuant to these Articles.

Chief Executive means the Chief Executive for the time being of the Exchange.

Class means a class of the Exchanges Ordinary Shares and in relation to aMember means a Member holding shares of that class.

Commission means the Securities and Exchange Commission of Pakistan.

Companies Ordinance means the Companies Ordinance, 1984 or any statutorymodification or re-enactment thereof for the time being in force.

Connected Person means in relation to a natural person, a spouse, real step orhalf sibling, lineal ascendant or descendent of such person, a partner, promoter orsubstantial shareholder of an undertaking, company or body corporate of whichsuch person is also a partner, promoter or substantial shareholder or an undertaking,company or body corporate in which such person is a partner, promoter, substantial


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shareholder or director; in relation to a legal person a Connected person means anundertaking, company or body corporate which is a holding, subsidiary orassociated company of such legal person.

Corporatisation means the conversion of the Exchange from a company limitedby guarantee to a public company limited by shares, and Corporatised shall meana company limited by shares.

Court means the court having jurisdiction under the Companies Ordinance.

Date of Corporatisation means the date on which the Registrar issues acertificate of re-registration to the Exchange as evidence of its change in status from

a company limited by guarantee to a public company limited by shares.

Date of Demutualization means the date on which the Registrar issues acertificate of re-registration to the Exchange in accordance with the provisions of

section 6 of the Act.

Demutualization means the segregation of the majority ownership of theExchange from the right to trade on the Exchange.

Directors means the Directors of the Company including the Directors elected,appointed or nominated pursuant to these Articles, the Companies Ordinance andthe Act and shall include alternate directors.

Exchange means Islamabad Stock Exchange Limited.

Electronic and Electronically includes electrical, digital, magnetic, optical,bio-metric, electro-chemical, wireless, electromagnetic technology or by any other

means of information technology.

Financial Institution includes foreign or local commercial banks, developmentfinancial institutions, non-banking finance companies, insurance companies, stockexchanges, commodity exchanges, derivative exchanges or any such other entitywhich has been notified by the Commission as a financial institution for thepurposes of the Act.

Government means the Federal or any Provincial Government in Pakistan.

Initial shareholders mean the legal owners of the shares of the Exchange on thedate of corporatisation.

Member means a subscriber to the memorandum of the company and everyperson to whom is allotted, or who becomes the holder of, any share, scrip or othersecurity which gives him a voting right in the company and whose name is enteredin the register of members.

Memorandum means the Memorandum of Association of the Exchange as

originally framed or as altered from time to time in accordance with the provisionsof the Companies Ordinance and the Act.

Month means a calendar month according to the Gregorian calendar.

Office means the registered office for the time being of the Exchange.


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Ordinary Shares mean the shares issued by the Exchange carrying voting rightsin proportion to the shareholding, subject to the provisions of the CompaniesOrdinance.

Register of Members means the Register of Members to be maintained by theExchange, pursuant to the Companies Ordinance.

Seal means the common seal of the Exchange.

Secretary means any person appointed by the Board to perform the duties of aSecretary as specified in these Articles.

Securities means shares of various classes issued by companies and statutorycorporations, scrips, Term Finance Certificates, Sukuk Certificates (Sharia

Compliant Bonds), bearer and registered bonds, Bonds including FederalInvestment Bonds (FIBs), Pakistan Investment Bonds (PIBs) and Bonds issued by

Federal and Provincial Governments, local authorities, statutory bodies, statutory

corporations, etc., Foreign Currency Bonds, etc., Certificates of Investment, Unitsissued by Collective Investment Schemes and Real Estate Investment Trustsincluding shares in or securities of an investment company or units in or securitiesof a trust fund (whether open-ended or closed end), Treasury Bills, CommercialPapers, money market instruments and equity based Derivatives (options, swapsetc.), Participation Term Certificates, Modaraba Certificates, MusharakaCertificates, Government papers, Depository Receipts of all kinds issued by foreign

institutions (including Global Depository Receipts and American DepositoryReceipts) and other equity based and debt based instruments of all kinds, issued byany Pakistani or foreign companies or corporations, including Federal, Provincialand Local Governments and allowed to be traded at the stock exchanges, both inphysical form as well as scripless securities and shall include book-entry Securities

as defined under the Central Depositories Act, 1997.

Strategic Investor means a stock exchange, depository company, a derivativeexchange or a clearing house approved by the Commission in accordance with theprescribed criteria, for the purposes of acquiring shares of a stock exchange inpursuance of section 12 of the Act.

TRE Certificate or Trading Right Entitlement Certificate means a certificateissued by the Exchange evidencing the right of the TRE Certificate Holder to applyfor registration as a broker in accordance with the Brokers and Agents Registration

Rules, 2001 as amended from time to time.

TRE Certificate Holder or Trading Right Entitlement Certificate Holdermeans a person who is issued a TRE Certificate or who purchases or acquires suchTRE Certificate or is issued a fresh TRE Certificate in accordance with theprovisions of the Act and the regulations framed thereunder.

Undertaking means any trade or business of the Exchange.

Writing / in writing / written includes printing, typewriting and lithographyand where permitted or specified by the Board, also includes Electronictransmission, including but not limited to facsimiles, telex, downloading throughcomputers, electronic mail, other modes of representing or reproducing words in avisible form and any usual substitutes.


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2. The model regulations contained in the First Schedule to the Companies Ordinanceshall not apply to the Exchange except as reproduced hereunder.

3. In these Articles, unless repugnant to the context or meaning thereof:-(i) The Articles headings shall not affect the construction or interpretation of

any Article.

(ii) Words importing the masculine gender also include the feminine gender.

(iii) Expression referring to writing shall, unless the contrary intention appears,be construed as including references to printing, lithography, photography

and other modes of representing or reproducing words in a visible form

(iv) Words importing persons include bodies corporate.

(v) Word importing singular numbers shall also include plural numbers and

vice versa.

(vi) Unless the context otherwise require, words and expressions occurring butnot defined in the Articles shall have the same meanings respectivelyassigned to them in the Companies Ordinance, the Act, the Securities andExchange Ordinance, 1969 or any statutory modification or re-enactment.

BUSINESS

4. Any branch or kind of business which the Company is either expressly or byimplication authorized to undertake may be undertaken by the Directors at suchtime or times as they shall think fit, and further may be suffered by them to be in

abeyance whether such branch or kind of business may have been actuallycommenced or not so long as the Directors may deem it expedient not to commenceor proceed with such branch or kind of business.

CAPITAL AND CLASS OF SHARES

5. The authorized share capital of the Exchange is Rs.7,000,000,000/- (Rupees SevenBillion Only) divided into 700,000,000 Ordinary Shares of Rs.10/- each. TheExchange may increase, reduce, consolidate, divide and sub-divide, cancel orotherwise vary the rights of its shares or reorganize its share capital and issue sharesof different kinds or classes therein of higher or lower denominations in accordance

with the provisions of the Companies Ordinance, and to attach thereto respectively

such preferential, deferred, qualified or special rights, privileges or conditions andto vary, modify or abrogate any such rights or conditions in such manner as may forthe time being be provided by the Exchange in such manner as the Exchange maybe authorized to do subject to applicable laws.

6. Subject to applicable law and in particular Section 90 of the Companies Ordinance,the Exchange may issue shares with different rights, restrictions and privilegesincluding but not limited to the following as approved by the Exchange by SpecialResolution:

(i) different voting rights, voting rights proportionate to the paid-up value of

shares held or voting rights for specific purposes only or no voting rights ofshares;


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(ii) different rights for entitlement to receive notices and to attend the generalmeeting;

(iii) different rights for entitlement of bonus shares or right shares;

(iv) different rights for entitlement to Dividends;

(v) rights and privileges for an indefinite period, for a limited specified periodor for such period or periods as may from time to time be determined by theExchange; and

(vi) different manner and mode of redemption of shares subject to the

provisions of these Articles and Sections 85 and 95 (4) of the CompaniesOrdinance.

7. As regards the voting rights, the holders of the preference shares shall not beentitled to receive notice of, attend, or vote at, any general meeting of the Exchange,

except as otherwise provided by the Companies Ordinance, whereby the holders ofsuch shares would be entitled to vote separately as a class, that is with respect tovoting entitlement of the holders of preference shares on matters affectingrespectively their substantive rights and liabilities. Without prejudice to theforegoing, the holders of preference shares may attend the general meetings of theExchange as observers with permission of the chairman of the meeting.

8. As regards the entitlement of bonus or rights shares, the holders of preference sharesshall not be entitled to the first right to subscribe to the Ordinary Shares of theExchange, in the event that the Exchange increases its capital by the further issue ofOrdinary Shares or otherwise.

9. As regards the income of the Exchange, the profits which the Exchange maydetermine to disburse in respect of the financial year or other period for which theaccounts shall be made up, shall be applied in the following priority:

(i) in paying the holders of the preference shares, the rights to a preferentialDividend, cumulative or non-cumulative, as determined by the Board on thecapital paid up thereon payable as regards each financial year out of theprofits of the Exchange resolved to be distributed for that year, but shall notbe entitled to any further participation in profits; and

(ii) subject to the rights of any class of shares for the time being issued, indistributing the balance amongst the Ordinary Shares, according to the

amount paid up on the Ordinary Shares held by them, respectively.

10. As regards redemption, subject to Section 85 of the Companies Ordinance, theExchange may, upon giving the holders of the shares to be redeemed, notice inwriting, redeem the whole or any parts of the preference shares in accordance with

the terms and conditions of their issue.

11. As regards the conversion, the Exchange may partly or wholly convert thepreference shares in accordance with the terms and conditions of their issue.

12. As regards the capital or return of capital in a winding up or otherwise (except uponthe redemption of shares of any class of preference shares or the purchase by theExchange of its own shares), the surplus assets of the Exchange remaining afterpayment of its liabilities shall be applied in the following order of priority:


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(i) in paying to the holders of the preference shares, the capital paid up on thesame without any further right to participate in profits or assets; and

(ii) subject to the rights of any other class of shares for the time being issued indistributing the balance amongst the holders of the Ordinary Shares,according to the amounts paid up on the Ordinary Shares held by them

respectively.

13. For so long as the share capital of the Exchange is divided into different Classes, therights attached to either Class may only be varied or abrogated with the consent inwriting of the holders of three / fourths in nominal value of the issued shares of that

Class or with the sanction of a Special Resolution passed at a general meeting of theholders of the shares of that Class.

ISSUE OF SHARES

14.

The Exchange shall issue and allot shares in dematerialized format, forconsideration other than cash, to all the initial shareholders of the Exchange inaccordance with the Act. All such shares shall not, at any time or for any reason, beconvertible into physical format.

15. The Exchange shall disinvest shares held in the Blocked Account in accordancewith the Act.

Provided that, in accordance with the provisions of the Act the right to exercise thevoting powers attached to such shares in the blocked account shall remainsuspended till the time of sale of these shares.

Provided further that all rights in respect of the shares of each Initial Shareholderdeposited in the Blocked Account shall vest and be exercised in accordance with the

Act.

16. Any other shares issued by the Exchange in any manner other than prescribedabove, shall be in accordance with the provisions of applicable law and in particularthe Companies Ordinance.

17. The Exchange shall not issue partly paid shares. In the case of an issue of shares forcash, the amount payable on application shall be the full nominal amount of the

share, except where shares are issued at a discount.

FRACTIONAL SHARES

18. Subject to the terms of the Companies Ordinance, if and whenever as a result of anissue of new shares or any consolidation or sub-division of shares any Memberbecomes entitled to hold shares in fractions, the Board shall not be required to offer

or issue such fractional shares and shall be entitled to sell whole shares at areasonable price and pay and distribute to and amongst the members entitled to such

fractional shares in due proportion the net proceeds of the sale thereof. For thepurpose of giving effect to any such sale the Board may authorise any person totransfer the shares sold to the purchaser thereof, and the purchaser shall beregistered as the holder of the shares comprised in such transfer but he shall not beentitled to see the application of the purchase money nor shall his title to the sharesbe affected by any irregularity or invalidity in the proceedings in reference to thesale.


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SHARES IN PAYMENT FOR PROPERTY

19. Subject to the terms of the Companies Ordinance and the Act, the Board may allotand issue shares in the capital of the Exchange as payment or part payment for anyproperty sold or transferred, goods or machinery supplied, or for services renderedto the Exchange in the conduct of its business or affairs, and any shares which may

be so allotted may be issued as fully paid up shares, and if so issued, shall bedeemed to be fully paid up shares.

NO PURCHASE OF OR LOAN ON EXCHANGES SHARES

20. Except as permitted in Section 95 and Section 95A of the Companies Ordinance andany rules in that regard made under the Companies Ordinance, the Exchange shall

not purchase or otherwise acquire any of its shares or the shares of its holdingcompany (if any), and shall not give whether directly or indirectly and whether by

means of a loan, guarantee, the provision of security or otherwise, any financial

assistance for the purpose of or in connection with a purchase or subscription madeor to be made by any person of any shares of the Exchange or its holding company(if any) or give any loan upon the security of any shares of the Exchange or those ofits holding company (if any).

EVIDENCE OF MEMBERSHIP

21. Any application for subscription signed by or on behalf of an applicant orsubscriber for shares in the Exchange, followed by an allotment of any sharestherein, shall, be an acceptance of shares within the meaning of the Articles, andevery person who thus or otherwise accepts any shares and whose name is enteredon the Register of Members shall for the purposes of the Articles be a Member.

NAMES AND ADDRESSES OF SHAREHOLDERS

22. Every shareholder shall name a place to be registered as his address and suchaddress shall, for all purposes, be deemed his place of residence.

23. Any shareholder who shall change his name or place of abode shall notify thechange of name or abode, as the case may be, to the Exchange in order that thesame may be registered.

TRUST NOT RECOGNISED

24. Save as herein otherwise provided, the Exchange shall be entitled to treat the personwhose name appears on the Register of Members as the holder of any shares as theabsolute owner thereof, and accordingly shall not (except as ordered by a Court ofcompetent jurisdiction or as by law required) be bound to recognise any trust orequity orbenami, equitable, contingent or other claim to or interest in such shares,

on the part of any other person whether or not it shall have express or implied noticethereof.

REGISTER

25. The Exchange shall keep at its Office a register of its Directors and managerscontaining with respect to each of them the particulars as required by theCompanies Ordinance and shall send to the Registrar of Companies a return in theprescribed form containing the particulars specified in the Register and shall from


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time to time notify to the Registrar of any change that takes place in such Directorsand managers, as required by the Companies Ordinance.

26. (1) The Directors shall cause to be kept, in one or more books or as an ElectronicRecord, a Register of Members.

(2) The aforesaid registers shall be kept at the Office, and except when closed under

the provisions of these Article, shall be open to the inspection of the Members anddebenture holders of the Exchange during the business hours, subject to suchreasonable restrictions, as the Exchange in General Meeting may impose, so that notless than two (2) hours in each day be allowed for inspection. The registers shall beopen to the inspection of the Members or debenture holders of the Exchange gratis

and to the inspection of any other Person on payment of such amount not exceedingthe prescribed amount as the Exchange may fix; and any such Member, debenture

holder or other Person may make extracts there from.

UNDERWRITING AND COMMISSION

27. Subject to Section 82 of the Companies Ordinance, the Exchange may at any timepay a commission to any person for subscribing or agreeing to subscribe, (whetherabsolutely or conditionally) for any shares or debentures or procuring or agreeing toprocure subscription, whether absolute or conditional, for any shares or debenturesof the Exchange, but so that the amount or rate of commission shall not exceed therate determined by the Exchange (or such other rate as may be prescribed by the

Commission under the Companies Ordinance) of the price at which the shares areissued or of the nominal value of the debentures in each case subscribed or to besubscribed. The Exchange may also pay brokerage on such rate as may beprescribed by the Commission in respect of any subscription for shares ordebentures.

RESTRICTION ON SHAREHOLDING

28. No Initial Shareholder, member of the general public, including a company, a TRECertificate Holder or a financial institution shall, directly or indirectly, acquire, holdor control Shares in excess of the thresholds prescribed in the Act or by theCommission from time to time.

CERTIFICATES AND TRANSFER AND TRANSMISSION OF SHARES

29. The Exchange shall satisfy all conditions and apply for its shares to be declared aseligible securities by CDC.

30. The transaction of transfer of any shares in the Exchange shall be transacted by thetransferor and transferee in accordance with the procedure laid down in theCompanies Ordinance and the procedures as prescribed by CDC.

WHEN REGISTER MAY BE CLOSED

31. The Board shall have power on due notice (given in the manner prescribed in theCompanies Ordinance) to close the Register of Transfers of Shares for suchperiod(s) of time not exceeding thirty days at a time or forty-five days in any year.

TRANSMISSION OF SHARES OF DECEASED MEMBER


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32. In the case of the death of a shareholder, the survivor, where the deceased was ajoint holder, and (subject as hereinafter provided), where the deceased was a sole oronly surviving holder, the executors or administrators of the deceased holding aGrant or Probate or Letters of Administration or Succession Certificate or thenominees of the deceased appointed under Section 80 of the Companies Ordinance,or any person or persons mentioned in any Succession Certificate effective inPakistan shall be the only persons recognised by the Exchange as having any title to

the shares, but nothing herein contained shall release the estate of a deceased holder(whether sole or joint) from any liability, (whether sole or joint), in respect of anyshare solely or jointly held by him. In any case in which a grant of probate orletters of administration or succession certificate to the estate of a deceased sole oronly surviving holder has not been obtained or a nomination was not made by the

deceased as above mentioned, the Board may, but shall not be bound to, recognisethe title of any person claiming to be entitled to the deceased holder's share on

production by such claimant of any other evidence of title as the Board may deemsufficient, and upon the claimant furnishing such indemnity, if any, as the Board

may require.

RESTRICTION ON TRANSFERS

33. No Member shall transfer or otherwise dispose of any of his shares except inaccordance with the provisions of these Articles, being at all times subject to theprovisions of the Companies Ordinance and the Act.

RIGHT OF SURVIVOR TO RECEIVE DIVIDENDS AND

OTHER ADVANTAGES

34. A person becoming entitled to a share by reason of the death or insolvency of theholder shall be entitled to the same dividends and other advantages to which he would

be entitled if he was the registered holder of the share, except that he shall not beforebeing registered as a Member in respect of the share, be entitled in respect of it to

exercise any rights conferred by membership in relation to meetings of the Exchange.

LIABILITY FOR TRANSMISSION

35. The Exchange shall incur no liability or responsibility whatsoever in consequence ofits registering or giving effect to any transfer of shares made or purporting to be madeby any apparent legal owner thereof (as shown or appearing in the register) to theprejudice of persons having or claiming any equitable right, title or interest to or in the

same shares, notwithstanding that the Exchange may have had notice of suchequitable right, title or interest or notice prohibiting registration of such transfer, and

the Exchange shall not be bound or required to regard or attend or give effect to anynotice which may be given to it of any equitable right, title or interest, or be under anyliability whatsoever for refusing or neglecting so to do, but the Exchange shallnevertheless be at liberty to regard and attend any such notice and give effect thereto,if the Board shall so think fit.

FEE ON TRANSMISSION

36. There shall be paid to the Exchange in respect of every transmission of Shares suchfee as the Directors may from time to time prescribe.

CONDITIONS OF BONDS


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37. Any bonds, debentures or other securities to be issued by the Exchange shall beunder the control of the Board which may issue them upon such terms andconditions and in such manner and for such consideration as shall be considered bythe Board to be for the benefit of the Exchange.

ISSUE AT DISCOUNT

38. Any bonds, debentures or other securities may be issued at a discount, premium orotherwise and with any special privileges as to redemption, surrender, drawings,convertibility into shares, attending and voting at general meetings of the Exchange,appointment of Directors, and otherwise, provided that debentures with the right tobe converted into shares shall not be issued without the consent of the Exchange in

general meeting obtained by way of a Special Resolution, subject to Section 87 andother provisions of the Companies Ordinance.

PAYMENT BY DIRECTORS

39.

If the Directors or any of them or any other person shall become personally liablefor the payment of any sum primarily due from the Exchange, the Board mayexecute or cause to be executed any mortgage, charge or security over or affectingthe whole or any part of the assets of the Exchange by way of indemnity to securethe Directors or persons so becoming liable as aforesaid from any loss in respect ofsuch liability.

GENERAL MEETING WHEN TO BE HELD

40. A general meeting, to be called the Annual General Meeting, shall be held, inaccordance with the provisions of Section 158 of the Companies Ordinance, once atleast in every calendar year within a period of four (4) months following the close

of the financial year of the Exchange and not more than fifteen months after theholding of its last preceding Annual General Meeting as may be determined by the

Board.

EXTRAORDINARY GENERAL MEETING

41. Any general meetings of the Exchange other than Annual General Meetings shall becalled Extraordinary General Meetings.

WHO MAY CALL EXTRA-ORDINARY GENERAL MEETINGS

42. The Directors may call an Extraordinary General Meeting. Further theExtraordinary General Meetings shall also be called on such requisition, or indefault, may be called by such requisitionists, as is provided by Section 159 of theCompanies Ordinance. An Extraordinary General Meeting may be held in suchplaces in Pakistan as the Board may determine. The particulars of business to betransacted in the Extraordinary General Meeting shall be detailed in the agenda of

the meeting and business transacted at an Extraordinary General Meeting shall berestricted to the business on the agenda for the said meeting.

NOTICE OF MEETINGS

43. Subject to requirements of the Companies Ordinance, twenty-one (21) days' noticeat the least (exclusive of the day on which the notice is served or deemed to beserved, but inclusive of the day for which notice is given) specifying the place, theday and the hour of general meeting and, in case of special business, all material


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facts concerning such business, shall be given in a manner provided by theCompanies Ordinance for the general meetings to such persons as are, under theCompanies Ordinance or the Articles, entitled to receive such notices from theExchange. In addition a notice of a General Meeting shall be published in at leastone issue each of a daily newspaper in the English language and a daily newspaperin the Urdu language having circulation in the Province in which each StockExchange listing the shares of the Exchange is situated. Subject to the permission of

the Commission or in accordance with the provisions of the Companies Ordinanceif applicable, notices of general meeting may be given to Members by facsimile oremail if so provided by the Member.

44. In the case of an emergency affecting the business of the Exchange anExtraordinary General Meeting may be convened by such shorter notice as theRegistrar of Companies may authorize.

45. Where any special business, that is to say business other than consideration of theaccounts, balance sheet and the reports of the Directors and Auditors, the

declaration of dividend, the appointment and fixation of the remuneration ofAuditors and the election of Directors (all such matters being herein referred to asordinary business) is to be transacted at a General Meeting, there shall be annexedto the notice of such meeting a statement setting out all such facts as may bematerial for the consideration of such business including the nature and extent of theinterest (whether direct or indirect) of any Director, and where the item of businessinvolves approval of any document, the time and place appointed for inspection

thereof, and to the extent applicable such a statement shall be annexed to the noticealso in the case of ordinary business to be transacted at the meeting.

46. Where a resolution is intended to be proposed for consideration at a GeneralMeeting in some special or particular form, a copy thereof shall be annexed to the

notice convening such meeting.

47. A notice for a General Meeting convened for the election of Directors shall state thenumber of Directors to be elected at that meeting and the names of the retiringDirectors.

48. The notice of every General Meeting shall prominently specify that a proxy may beappointed who shall have the right to attend, demand and join in demanding a polland vote on a poll and speak at the meeting in the place of the Member appointinghim and shall be accompanied by a form of proxy acceptable to the Exchange.

SPECIAL BUSINESS

49. All business shall be deemed special that is transacted at an Extraordinary GeneralMeeting and also all that is transacted at an Annual General Meeting with theexception of declaring a dividend, the consideration of the accounts, balance sheetand the reports of Directors and auditors, the election of directors and the

appointment of and fixing of the remuneration of the auditors. Where it is proposedthat a Special Resolution be moved at a general meeting, notice of the meeting shall

specify the intention to propose the resolution as a Special Resolution.

OMISSION TO GIVE NOTICE

50. In a case in which notice of any meeting is given to the shareholders individually,the accidental omission to give notice to any of the Members or the accidental non-receipt thereof shall not invalidate the proceedings at any such meeting.


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QUORUM AT GENERAL MEETING

51. Two (2) members present in person and representing not less than twenty fivepercent (25%) of the total issued shares of the Exchange either on their own accountor as proxies shall be the quorum for a general meeting. No business shall betransacted at any general meeting unless the requisite quorum is present at the time

when the meeting proceeds to business.

WHO TO PRESIDE IN GENERAL MEETING

52. The Chairman shall be entitled to take the chair at every general meeting. If there isno Chairman or if at any meeting he shall not be present within fifteen minutes afterthe time appointed for holding such meeting or is unwilling to act, the Directors

present may elect a Director as Chairman and if none of the Directors is present orbeing present is unwilling to act as Chairman, the members present whether in

person or by proxy shall choose one of the members to be the Chairman. Provided

that the Chairman of the meeting shall, in any case, not be a TRE certificate holder.

53. No business shall be discussed at any General Meeting except the election of achairman so long as the chair is vacant.

ADJOURNMENT OF MEETING FOR LACK OF QUORUM

54. If within half an hour of the time appointed for the holding of a general meeting aquorum is not present, the meeting shall stand adjourned to the same day in thefollowing week at the same time and place. If at the adjourned meeting a quorum isnot present the members present personally being not less than two shall be thequorum and may transact the business for which the meeting was called.

ADJOURNMENT BY CHAIRMAN

55. The Chairman may (and shall if so directed by the meeting) adjourn the meetingfrom time to time, but no business shall be transacted at any adjourned meetingother than the business left unfinished at the meeting from which the adjournmenttook place. When a meeting is adjourned for ten days or more, notice of theadjourned meeting shall be given as in the case of an original meeting, but it shallnot be necessary to specify in such notice the nature of the business to be transactedat the adjourned meeting. Save as aforesaid it shall not be necessary to give any

notice of an adjournment or of the business to be transacted at an adjournedmeeting.

VOTING BY SHOW OF HANDS

56. Upon a show of hands every Member entitled to vote and present in person or byproxy shall have one vote, and upon a poll every Member entitled to vote and

present in person or by proxy shall have one vote for every share held by him.

VOTING ON RESOLUTIONS

57. At any general meeting a resolution put to the vote of the meeting shall be decidedon a show of hands, unless a poll is (before or on the declaration of the results ofthe show of hands) demanded. The procedure for demanding a poll is provided inthese Articles.


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58. A declaration by the Chairman that a resolution put to the vote in a GeneralMeeting has been carried or carried unanimously or by a particular majority andan entry to that effect in the books of the proceedings of the Exchange shall beconclusive evidence of the fact without further proof of the number or proportionof the votes recorded in favour of or against such resolution.

POLL

59. A poll may be ordered to be taken by the Chairman on his own motion, or may bedemanded by at least five (5) Members present in person or by proxy; conferring aright to vote on the resolution being shares on which an aggregate sum has beenpaid up which is not less than one-tenth of the total sum paid up on all the shares

conferring that right.

60. If a poll is demanded as aforesaid it shall be taken in such manner and at such timeand place as the Chairman of the meeting directs, and either at once or after an

interval or adjournment of not more than fourteen days from the day on which the

poll is demanded and the results of the poll shall be the resolution passed at themeeting at which the poll was held. The demand for a poll may be withdrawn at anytime by the person or persons who made the demand.

61. Any poll demanded on the election of a Chairman of a meeting or on any questionof adjournment shall be taken at the meeting and without adjournment.

62. If a poll is demanded, it shall be taken in such manner as the chairman of themeeting directs. The votes given on a poll shall be scrutinized by the chairman or ascrutineer nominated by him and, where Members or proxies have demanded thepoll also by a scrutineer nominated by them. The result of the poll shall beannounced by the chairman and shall be deemed to be the decision of the meeting

on the resolution in respect of which the poll was demanded.

63. The demand for a poll shall not prevent the continuation of a meeting for thetransaction of any business, other than the question on which the poll wasdemanded.

MINUTES

64. Minutes shall be made in books provided for the purpose of all resolutions andproceedings at general meetings, and any such minutes if signed by any person

purporting to have been the Chairman of the meeting or next following meetingshall be receivable as evidence of the facts therein stated without further proof.

MINUTE BOOKS

65. The Books containing minutes of proceedings of general meetings of the Exchangeshall be kept at the Office of the Exchange and shall during business hours (subject

to reasonable restrictions as the Board may from time to time impose but so that noless than two hours each day is allowed for inspection) be open to the inspection of

any Member without charge.

REPRESENTATIVES OF CORPORATE MEMBERS

66. Any company or other body corporate which is a Member of the Exchange may byresolution of its Directors or other governing body authorise such person as it thinks fitto act as its representative at any meeting of the Exchange or of any class of Members


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of the Exchange, and the person so authorised shall be entitled to exercise the samepowers on behalf of the company or body corporate which he represents as thatcompany or body corporate could exercise if it were an individual Member of theExchange, present in person. The production before or at the meeting of a copy of suchresolution purporting to be signed by a director or the secretary of such company orbody corporate and certified by him as being a true copy of the resolution shall beaccepted by the Exchange as sufficient evidence of the validity of the appointment of

such representative. A company or body corporate which is a Member of the Exchangebut which is not resident in Pakistan may appoint a representative as aforesaid by telexmessage or facsimile transmission or electronic mail which, if purporting to be sent bysuch company or corporation, need not be certified as a true copy as aforesaid .

VOTING BY MEMBER OF UNSOUND MIND

67. A Member of unsound mind, or in respect of whom an order has been made by anyCourt having jurisdiction in lunacy, may vote, whether on show of hand or on a

poll, by his committee or other legal guardian, and any such committee or guardian

may, on a poll, vote by proxy.

PROXY

68. Every proxy shall be appointed in writing under the hand of the appointer or by anagent duly authorised under a Power of Attorney or if such appointer is a companyor corporation under the Common Seal of the Exchange or corporation or the hand

of its Attorney who may be the appointer. A proxy must be a Member. A proxyshall have such right as respects speaking and voting at a meeting as are availableto a Member personally present at the meeting. A Member shall not be entitled toappoint more than one proxy to attend any one meeting. If any Member appointsmore than one proxy for any one meeting and more than one instruments of proxy

are deposited with the Exchange, all such instruments shall be rendered invalid.

PROXY TO BE DEPOSITED AT THE OFFICE

69. No person shall act as proxy unless the instrument of his appointment and the powerof attorney, if any, under which it is signed, shall be deposited at the Office at leastforty-eight hours before the time for holding the meeting at which he proposed tovote.

FORM OF PROXY

70. An instrument appointing a proxy may be in the following form or a form as nearthereto as may be:

I, _____________________ of _______________________, being a memberof Islamabad Stock Exchange Limited, hereby appoint _____________________ of

_____________ as my proxy to vote for me and on my behalf at the (annual,extraordinary, as the case may be) general meeting of the Exchange to be held on

the _____ day of _____ and at any adjournment thereof.

Dated: ___________ Signed: ____________

VALIDITY OF PROXY


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71. A vote given in accordance with the terms of an instrument of proxy shall be validnotwithstanding the previous death or insanity of the principal or revocation of theproxy or of the authority under which the proxy was executed, or the transfer of theshares in respect of which the proxy is given, provided that no intimation in writingof such death, insanity, revocation or transfer as aforesaid shall have been receivedby the company at the Office before the commencement of the meeting or

adjourned meeting at which the proxy is used. Provided nevertheless that theChairman of any meeting shall be entitled to require such evidence as he may in hisdiscretion think fit of the due execution of an instrument of proxy and that the samehas not been revoked.

VALIDITY OF VOTE

72. No objection shall be made to the validity of any vote except at the meeting or thepoll at which such vote shall be tendered, and every vote whether given personally

or by proxy not disallowed at such meeting or poll shall be deemed valid for all

purposes of such meeting or poll.

CHAIRMAN TO HAVE A CASTING VOTE

73. If any question is raised, the Chairman of the meeting shall decide on the validity ofevery vote tendered at such meeting in accordance with these Articles. In the case ofany equality of votes, whether on a show of hands or on a poll, the Chairman shall

have and exercise a casting vote.

CHAIRMAN

74. Prior to the completion of Demutualization, the Chairman of the Exchange shall beelected by the Board from amongst the directors nominated by the Commission.

75. Following the completion of Demutualization, the Chairman of the Exchange shallbe elected in accordance with the Companies Ordinance and the Act from amongstthe Directors who do not represent TRE Certificate Holders or any personsconnected therewith.

FIRST DIRECTORS

76. The first Directors of the Exchange shall be appointed in accordance with theprovisions of the Act and shall comprise of four (4) nominees who will beapproved by the Board and six (6) nominees who will be nominated by the

Commission. The first directors nominated by the Board shall stand replacedwithin thirty (30) days of the date of Demutualization by directors elected at thegeneral meeting of the Exchange and the first directors nominated by theCommission shall stand replaced in accordance with these Articles.

ELECTION OF DIRECTORS

77. Subject to these Articles and the provisions of the Act, after the first appointment ofDirectors, the number of elected Directors fixed by the Board under these Articlesshall be elected to office by the members in general meeting in the followingmanner, namely:

(i) a Member shall have such number of votes as is equal to the product ofvoting shares held by him and the number of Directors to be elected;


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(ii) a Member may give all his votes to a single candidate, or divide thembetween more than one of the candidates in such manner as he may choose;and

(iii) the candidate who gets the highest number of votes shall be declared electedas Director and then the candidate who gets the next highest number of

votes shall be so declared, and so on until the total number of Directors tobe elected has been so elected.

78. Where the number of candidates is equal to or less than the number of Directors tobe elected it will not be necessary to hold an election as laid down in this Article

and all the candidates shall be deemed to have been elected under this Article.

CONSENT TO ACT AS DIRECTOR TO BE FILED

79. No person shall be appointed or nominated as a Director or ManagingDirector/Chief Executive Officer of the Exchange or shall represent as holding suchoffice, nor shall any person describe or name any other person as a Director orproposed Director or Managing Director/Chief Executive Officer or proposedManaging Director/Chief Executive Officer of the Exchange unless such person orsuch other person has given his consent in Writing to such appointment ornomination and that consent has been filed by the Exchange with the Registrarbefore such appointment or nomination or being described or named as a Director

or proposed Director or Managing Director/Chief Executive Officer of theExchange, as the case may be.

DIRECTORS

80. (i) The first Directors shall be appointed in accordance with Article 76 above readwith the provisions of the Act.(ii) The first Directors appointed by the Commission shall be co-opted by nomineesof the strategic investor in accordance with the directive of the Commission in termsof the Act or in subsequent elections by shareholder interest of the strategic investorand financial institutions or representatives of the general public as the case may be,in the manner provided herein below:

(a) Upon sale of shares held in Blocked Account to the strategic investor, theCommission shall issue a directive in terms of the Act wherein the number ofDirectors as specified by the Commission representing shareholding interest

of the strategic investor(s) shall be co-opted by the nominees of the strategicinvestor or replaced in an election of Directors held as per the requirements ofthe Companies Ordinance.

(b) Upon sale of shares held in Blocked Account to the general public andfinancial institution(s), the Commission shall issue a directive in terms of theAct wherein the number of Directors as specified by the Commission

representing shareholder interest of the general public or the financialinstitution(s), shall be replaced in an election of Directors held as per therequirements of the Companies Ordinance.

(c) When all first Directors nominated by the Commission have been co-opted orreplaced by the Directors representing shareholder interest of the strategicinvestor(s), general public or financial institution(s), all Directors of the


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Exchange shall be elected in the manner as prescribed in the CompaniesOrdinance. However, before every General Meeting at which Directors are tobe elected, except for the first election under section 10 of theDemutualization Act, and not later than thirty-five days preceding the date ofsuch meeting, the Directors shall fix the number of elected Directors that theExchange shall have from the effective date of the election at such meeting.The number of Directors so fixed shall not be increased or reduced by the

Directors so as to have effect before the effective date of election at the nextsuch General Meeting at which Directors are to be elected, except with theprior approval of the Exchange in a General Meeting.

(iii) All Directors shall have to fulfill the formalities of the Fit & Proper Criteria

as prescribed by the Exchange with prior approval of the Commission in this regard,prior to their appointment as Directors and comply with any other regulations of the

Exchange.

(iv) The Chief Executive, shall by virtue of his office be, a Director on the Board.

(v) After sale of shares in Blocked Account to the strategic investor, general publicand/ or financial institutions, at least one third of the directors on the Board shall beindependent directors as defined in the Code of Corporate Governance asapproved by the Commission.

(vi) The Commission may nominate such number of directors in addition to the total

number of directors on the Board, as it may from time to time prescribe.

81. The Members in General Meeting shall elect the Directors who are not ineligible inaccordance with Section 187 of the Companies Ordinance and this Article. Anyperson claiming to be eligible who desires to offer himself for election shall,

whether he is a retiring Director or not, file with the Exchange not later thanfourteen days before the date of the General Meeting at which Directors are to be

elected, a notice that he, being eligible, intends to offer himself for election as aDirector at that meeting and that he consents to act as a Director if elected. If suchperson is elected a Director, then the Exchange shall file his consent to act as aDirector with the Registrar of Companies within fourteen days of his election asrequired by Section 184 of the Companies Ordinance. A person offering himself forelection as a Director may withdraw his candidature at any time before the holdingof the election and may do so by withdrawing the notice in which he offered himselffor election. Not later than seven days before the date of the meeting the Exchange

will notify the Members of the persons offering themselves for election as Directorsat such meeting and shall so notify the Members by publication in at least one issue

each of a daily newspaper in the English language and a daily newspaper in theUrdu language having circulation in the Province in which each Stock Exchangelisting the shares of the Exchange is situate.

82. In addition to and subject to terms of the Act, a Director shall cease to hold hisoffice:

a. if he becomes ineligible to be appointed as a Director on any one or more ofthe grounds specified in Section 187 of the Companies Ordinance. Providedthat the requirement of section 187(h) of the Companies Ordinance shall notbe applicable on directors nominated by the Commission; or

b. if he ceases to be a Director by virtue of any provision of any law or hebecomes prohibited by law from being a Director; or


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c. if he becomes bankrupt or a receiving order is made against him or hemakes any arrangement or composition with his creditors generally; or

d. if he is, or may be, suffering from mental disorder and an order is made by acourt claiming jurisdiction in that behalf (whether in Pakistan or elsewhere)

in matters concerning mental disorder for his detention or for theappointment of a receiver, curator bonis or other person by whatever namecalled to exercise powers with respect to his property or affairs; or

e. if he absents himself from three (3) or more consecutive meetings of theDirectors or from all meetings of the Directors for a continuous period ofthree (3) months, whichever is the longer, without leave of absence from theDirectors.

f. he or any firm of which he is a partner or any private company of which heis a director without the sanction of the Exchange in General Meetingaccepts or holds any office of profit under the Exchange other than that of a

Chief Executive or a legal or technical adviser or a banker; or

g. if being a Member of the Exchange, he ceases to be a Member of theExchange, or is expelled from the Exchange or being a nominee of acorporate Member, the corporate entity ceases to be a Member or his

nomination or appointment is withdrawn by the nominating or appointingauthority.

h. if he by notice in writing resigns from his office.i. if he or any firm of which he is a partner or any private company of which

he is a Director accepts or holds any office of profit under the Exchange,

without the sanction of the Board.

j. he or any firm of which he is a partner or any private company of which heis a Director accepts a loan or guarantee from the Company incontravention of Section 195 of the Ordinance; or

k. if he is concerned or interested in or participates in the profit of any contractwith or work done for the Exchange, without the sanction of the Board; or

l. if he serves on the Exchange (and in the case of a Government AppointedDirector, on the Financial Secretary as well) notice of his wish to resign, inwhich event he shall ipso facto vacate office on the service of such notice

on the Exchange (and in the case of a Government Appointed Director, onthe Financial Secretary as well) or such later time as is specified in suchnotice; or

m. in the case of the Chief Executive, he ceases to hold such office; orn. in the case of a Director other than a Government Appointed Director and

Director nominated by the Commission, if he is removed by ordinaryresolution of the Exchange in accordance with any law.

TERM OF OFFICE

83.

A Director elected under these Articles shall hold office for a period of three (3)years, unless he earlier resigns, becomes disqualified from becoming Director orotherwise ceases to hold office. A retiring Director shall be eligible for re-election.


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REMOVAL

84. The Exchange in General Meeting may remove a Director, except a directornominated by the Commission, from office by a resolution passed with the requisitenumber of votes determined in accordance with the provisions of Section 181 of theOrdinance. However, a Director nominated by the Commission shall only be

removed upon a directive of the Commission.

CONTINUING DIRECTORS TO ACT

85. The continuing Directors may act notwithstanding any vacancy in their body, but ifthe minimum falls below the minimum number fixed by Companies Ordinance, the

Directors shall not, except for the purpose of filling a vacancy in their number orconvening a general meeting, act so long as the number remains below the

minimum.

FILLING CASUAL VACANCY

86. Subject to the proviso appended to sub-section (2) of section 10 of theDemutualization Act, any casual vacancy occurring among the elected Directorsmay be filled up by the Directors, but a person so appointed shall hold office for theremainder of the term of the Director in whose place he is appointed. The Company

shall prior to every such appointment secure in the form prescribed for this purpose,the consent and certificate of the person concerned consenting to act as a Directorand certifying that he is not ineligible to become a Director and shall withinfourteen days of his appointment file such consent with the Registrar of Companiesas required by Section 184 of the Ordinance. A casual vacancy in respect of a

Director nominated by the Commission shall be filled up as per the directive of theCommission.

REMUNERATION OF DIRECTORS

87. Subject to any general or specific conditions or restrictions imposed by theCommission or under the Companies Ordinance or any other law applicable, to theExchange and until otherwise determined by the Exchange in general meeting,every Director (including an alternate Director but excluding the Chief Executiveand a full time Working Director) shall be entitled to be paid remuneration for his

services as may be determined in accordance with the applicable law. In addition,subject to the applicable law and in particularly Section 191 of the Companies

Ordinance, each Director (including each alternate Director and the executiveDirectors), shall be entitled to be reimbursed his reasonable expenses as determinedby the Board incurred in consequence of his attendance at Board meetings of theDirectors, or of Committee of Directors.

EXTRA REMUNERATION MAY BE PAID TO A DIRECTOR

88. Any Director who serves on any Committee or who devotes special attention to thebusiness of the Exchange or who otherwise performs services which, in the opinionof the Board, are outside the scope of the statutory duties of a Director may be paidsuch extra remuneration as may be determined by the Board.

89. The Directors on behalf of the Exchange may pay a gratuity or pension or allowanceon retirement to any Director who has held any other salaried office or place of


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profit with the Exchange or to his widow or dependents and may makecontributions to any fund and pay premiums for the purchase or provision of anysuch gratuity, pension or allowance as may be determined by the Company in itsgeneral meeting.

SHARE QUALIFICATION FOR DIRECTORS

90. A Director must be a Member holding shares of the nominal value of Rupees OneThousand in the Exchange, in his own name at least two months prior to the electionor within two months after the co-option of such Member on the Board (unless herepresents the Government, institution, or an authority which is a member, or is a

full time working Director, or a Chief Executive, or a person representing a creditoron the Board or is nominated by the Commission), to qualify to act as a Director of

the Exchange. In the case of Directors representing interests holding shares of therequisite value, no such share qualification shall be required, provided intimation in

writing as to such representation is lodged with the Exchange forthwith upon

appointment / election of a Director.

GENERAL POWERS OF EXCHANGE VESTED IN DIRECTORS

91. The control of the Exchange and of the management of the business of theExchange shall vest in the Board which, in addition to the powers and authoritiesprovided by these Articles or otherwise expressly conferred upon them under any

applicable law, in particular the Companies Ordinance, may exercise all suchpowers and do all such acts and things as may be exercised or done by the Exchangeand are not hereby or by statute law expressly directed or required to be exercised ordone by the Exchange in a general meeting but subject nevertheless to theprovisions of any law and of these presents and to any regulations from time to time

made by the Exchange in general meeting provided that no regulation so made shallinvalidate any prior act of the Board which would have been valid if such regulation

had not been made.

SPECIAL POWERS OF EXCHANGE VESTED IN DIRECTORS

92. Subject to the provisions of the Companies Ordinance and any other law for thetime being in force and without prejudice to the general powers conferred by theseArticles, the Directors shall have the following powers:

(i) To purchase or otherwise acquire for the Exchange any property rightsprivileges which the Exchange has authorized to acquire at such price and

generally on such terms and conditions as they think fit and to sell, let,exchange or otherwise dispose of absolutely or conditionally any part of theExchange privileges upon such terms and conditions and for suchconsideration as they may think fit.

(ii) To pay for any property, rights, privileges acquired by or services renderedto the Exchange either wholly or partially in cash or in shares subject to the

provision of Section 86of the Companies Ordinance, bonds, debentures orother securities of the Exchange any such bonds, debentures or othersecurities may be either a specific charge upon all or any part of theproperty of the Exchange or not so charged.


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(iii) To make, draw, endorse, sign, accept, negotiate and give all cheques, billsof lading, drafts, orders, bills of exchange and other promissory notes andnegotiable instruments required in the business of the Exchange.

(iv) To secure the fulfillment of any contract, agreement or engagement enteredinto by the Exchange by mortgage or charge of all or any of the property(s)of the Exchange for the time being or in such other manner as they may

think fit.

(v) Subject to the provisions of the Act, to appoint and at their discretion toremove and / or suspend such agents other than managing agents, managers,secretaries, officers, servants for permanent or temporary or special services

as they may from time to time think fit and to determine their powers andduties and fix their salaries and emoluments and to require securities in such

instances and to such amount as they think fit.

(vi) To appoint any person or persons whether incorporated or not, to accept and

hold on trust for the Exchange any property belonging to the Exchange or inwhich it is interested or for any other purpose and to execute and to do allsuch deeds, documents and things that may be requisite in relation to anysuch trust and to provide for the remuneration of such trustee or trustees.

(vii) To institute conduct defend, compound or abandon any legal proceedingsby or against the Exchange or its officers or otherwise concerning the

affairs of the Exchange and also to compound and allow time for paymentor satisfaction of any debt due or any claims or demands by or against theExchange.

(viii) To refer any claims or demands by or against the Exchange to arbitration

and observe and perform the awards.

(ix) To make and give receipts, releases and other discharge for money payableto the Exchange and for the claims and demands of the Exchange.

(x) To act on behalf of the Exchange in all matters relating to bankruptcy andinsolvency.

(xi) To determine who shall be entitled to sign on the Exchanges behalf; bills,notes, receipts, acceptances, endorsements cheques, releases, contracts and

documents.

(xii) From time to time to provide for the management of the Exchange either indifferent parts of Pakistan or elsewhere in such manner as they think fit andin particular to establish branch offices and to appoint any person to be theattorney(s) or agent(s) of the Exchange with such powers, including thepower to sub delegate and upon such terms as they may think fit.

(xiii) To invest and deal with any of the monies of the Exchange not immediately

required for the purpose thereof upon such securities not being shares in thisExchange and in such manners as they may think fit and from time to timevary or release such investments.

(xiv) To execute in the name and on behalf of the Exchange in favour of anyDirector of the Exchange or other person who may incur or may be about toincur any personal liability for the benefit of the Exchange such mortgages


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of the Exchanges property, present and future, as they may think fit andsuch mortgage may contain a power for sale and such other powers,provisions and covenants as shall be agreed on.

(xv) To give to any person employed by the Exchange, a commission on the profitof any particular business or transaction or a share in the general profit of theExchange and such commission or share of profits shall be treated as part of

the working expenses of the Exchange.

(xvi) From time to time to make vary and repeal bye-laws for the regulation ofthe business of the Exchange its officers and servants.

(xvii) To enter into all such negotiations and contracts and rescind and vary allsuch contracts and execute and do all such acts, deeds and things in the

name and on behalf of the Exchange as they may consider expedient for orin relation to any of the matters aforesaid or otherwise for the purposes of

the Exchange.

(xviii) To establish, maintain, support and subscribe to any charitable or publicobjects and any institution, society or club which may be for the benefit of theExchange or the employees or may be connected with any town or placewhere the Exchange carries on business; to give pension, gratuities orcharitable aid to any person or persons who has/have served the Exchange orto the wives, children or dependants of such person or persons that may

appear to the Directors just or proper whether any such person, his widow,children or dependants have or have not a legal claim upon the Exchange.

(xix) Subject to the provisions of Section 227 of the Companies Ordinance beforerecommending any dividends to set aside a portion of the profit of the

Exchange to form a fund to provide for such pensions, gratuities orcompensation or to create any provident or benefit fund in such or any other

manner as to the Directors may seem fit.

(xx) To make and alter rules and regulations concerning the time and manner ofpayment of contributions of the employees and the Exchange respectivelyto any such funds and accrual, employment, suspension and for future of thebenefits of the said fund and the application and disposal thereof andotherwise in relation to the working and management of the said fund as theDirectors shall from time to time think fit.

(xxi) To delegate all or any of the powers hereby conferred upon them to such

person or persons as they may from time to time think fit.

POWER TO OBTAIN FINANCES AND GIVING OF SECURITIES

93. The Board may exercise all the powers of the Exchange to borrow from time to timeany moneys for the purposes of the Exchange from the members or from any otherpersons, firms, companies, corporations, government agencies, institutions or banks,

or the Directors may themselves lend moneys or provide finance to the Exchange inaccordance with the Companies Ordinance provided that the moneys being raiseddoes not exceed the share capital of the Exchange. Further, the Board may mortgageor charge Exchanges undertaking, property and assets, (both present and future),and to issue debentures and other securities, whether outright or as collateralsecurity for any debt, liability or obligation of the Exchange, or of any third party.The Board may from time to time borrow and accept deposits in accordance with


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the applicable law (but not to act as a finance or banking company) from themembers or other persons and lend any sum or sums of money for the purpose ofthe Exchange, for which they shall in particular have the following powers:

(i) To raise in such manner as the Exchange shall think fit in pursuance of itsobjects and in particular by commercial papers, bonds, participation termcertificates, term finance certificates, modaraba certificates, musharika,

leasing, mark up and by issue of all securities including securities not basedon interest for raising redeemable capital, resource funds from banks orfinancial institutions and to secure if required the repayment of any moneyborrowed, raised or owing by mortgage, charge or lien upon all or any ofthe property or assets of the Exchange both present and future including its

uncalled capital for the time being and also by a similar mortgage, charge orlien to secure and guarantee the performance by the Exchange or any other

person or company, of any obligation, undertaking by the Exchange or anyother person or company, as the case may be, but not to act as a finance or

banking company. Whenever any uncalled capital of the Exchange is

included in or charged by any security to the person in whose favour thesame is executed or any other persons in respect of such uncalled capital theprovision hereinbefore contained in regard to calls shall mutatis mutandisapply to calls made under such authority and may be made exercisableeither conditionally or unconditionally, presently or contingently, andwhether to the exclusion of the Directors powers or otherwise and shall beassignable if expressed so to be.

(ii) To raise money on commercial papers on such terms and conditions as theymay deem fit.

(iii) To issue Certificates or other securities at a discount, premium or otherwise

and with any special privileges as to redemption, surrender, drawing orotherwise and framed in such a way that the same shall be assignable free

from any equities between the Exchange and the original or any intermediateholders.

(iv) To facilitate and encourage the creation, issue or conversion of Certificates,bonds, obligations, shares, stocks, securities and to act as trustees inconnection with any such securities and to take part in undertakings orcompanies.

(v) To constitute any trust with a view to the issue of preferred or deferred or anyother special stocks or securities based on or representing any shares, other

assets specially appropriated for the purposes of any such trust and to settleand regulate, and if thought fit, to undertake and execute any such trust and toissue dispose or hold any such preferred or deferred or other special stocks orsecurities.

MINUTE BOOKS AND RECORD

94. The Exchange shall cause a fair and accurate summary of all proceedings of generalmeetings and meetings of its Board and Committees along with the names of thoseparticipating in such meetings to be entered in properly maintained books.

95. The Board shall cause minutes to be made in books provided for the purpose:(i) of all appointments of officers made by the Directors;


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(ii) of the names of Directors present at each meeting of the Board and of anycommittee of Directors;

(iii) of all resolutions and proceedings at all meetings of the Exchange, and ofthe Board, and of committee of Directors; and every Director present at anymeeting of Board shall sign his name in a Book to be kept for the purpose.

Any such minutes of any meeting of the Board or of a Committee of Directors, ifsigned or purporting to be signed by the Chairman of such meeting, or of the nextsucceeding meeting, shall be receivable as evidence of the matters stated in suchminutes.

MEETING OF THE BOARD OF DIRECTORS

96. The Directors may meet for the purpose of dispatch of business, adjourn, andotherwise regulate meetings of the Board as they think fit,provided that the

Directors shall meet at least once in each quarter of a calendar year. A resolutionmoved at any meeting of Directors shall be passed by a simple majority vote. Incase of an equality of votes, the Chairman shall have a second or casting vote. TheChief Executive or the Secretary may at any time, and shall on the writtenrequisition of two Directors at any time, summon a meeting of the Board. Unlessotherwise decided by the Board, at least seven clear days notice must be given to allDirectors to summon a meeting of the Board, and such meeting shall set forth the

purpose or purposes for which such meeting is summoned. With the consent of allthe Directors entitled to receive notice of a meeting, or to attend or vote at any suchmeeting, a meeting of the Board may be convened by shorter notice than specifiedin this Article. Any Director may waive notice of the time, place and purpose of anymeeting of Directors before, at or after such meeting. In case of urgent business, a

meeting of the Board may be called at shorter notice provided that notice in writingof such meeting is sent to all the Directors. Board meetings may be held in such

places in or outside Pakistan and may be held by teleconferencing or videoconferencing as the Board may determine.

97. Subject to any rules framed under or any regulations or directives issued pursuant tothe Companies Ordinance, Directors or Members of a Committee may participate ina meeting of the Directors or a Committee of Directors by means of anycommunication equipment whereby all persons participating in the meeting canspeak to and hear each other. Participation in a meeting in this manner shall be

deemed to constitute presence of such Director at such meetings for the purposes ofconstituting a quorum. Meetings will be treated as taking place where the largest

group of the Directors are or, if there is no such group, where the Chairman of themeeting is.

DISCLOSURE TO MEMBERS OF DIRECTORS INTEREST

98. Where by any contract or resolution of the Directors an appointment or a variationin the terms of an existing appointment is made (whether effective immediately or

in the future) of a Chief Executive, whole-time Director, Chief Operating Officer,Chief Financial Officer or Secretary of the Exchange, in which appointment ofany Director of the Exchange is, or after the contract or resolution becomes, inany way, whether directly or indirectly, concerned or interested, the Exchangeshall inform the Members of such appointment or variation in the manner requiredby Section 218 of the Companies Ordinance and shall comply with therequirements of that Section in regard to the maintaining of such contracts and


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resolutions open for inspection by Members at the Office, the provision ofcertified copies thereof and extracts therefrom and otherwise.

QUORUM OF DIRECTORS' MEETINGS AND POWERS

99. A meeting of the Board for the time being at which a quorum is present shall becompetent to exercise all or any of the authorities, powers and discretion by or

under the Articles vested in or exercisable by the Board generally. The quorumrequired for a meeting of the Directors shall be in accordance with the CompaniesOrdinance.

100. If as a consequence of the Directors or some of them being concerned or interestedin any contract or arrangement a quorum is not available for the transaction of anybusiness relating thereto on account of the provisions of Section 216 of the

Companies Ordinance, such business shall be referred to the Exchange in GeneralMeeting whose decision shall be carried into effect.

AS TO PRESIDING AT DIRECTORS MEETING

101. The Chairman shall, whenever present, preside as Chairman at each meeting of theBoard, but if at any meeting the Chairman is not present, the Chairman may appointa Director who is not a TRE certificate holder or its connected person to act as aChairman for that meeting or in the event the Chairman has not appointed suchDirector to act as Chairman and is not present at the meeting then, the Directors

present shall within fifteen minutes of the time fixed for the meeting, choose one ofthe Directors who is not a TRE certificate holder or its connected person to beChairman of such meeting.

WHEN ACTS OF MEETINGS OF THE BOARD OR COMMITTEE VALID

NOTWITHSTANDING DEFECTIVE APPOINTMENT ETC

102. All acts by any meeting of the Board or of a Committee of Directors, or by anyperson acting as a Director or alternate Directors, or by any person acting as aDirector or alternate Director shall, notwithstanding that it be afterwards discoveredthat there was some defect in the appointment of any such Director or personsacting as aforesaid, or that they or any of them were disqualified, be as valid as ifevery such Director or person had been duly appointed and was qualified to act.Provided that as soon as any such defect has come to notice, the Director or otherperson concerned shall not exercise the right of this office till the defect has been

rectified.

RESOLUTION BY CIRCULATION

103. A resolution in writing, signed by a majority of the Directors (or in their absencetheir Alternate Directors) for the time being in Pakistan (not being less than therequisite quorum of Directors) or by all the members of a committee for the time

being in Pakistan shall be as valid and effectual as if it had been passed at a meetingof the Directors, or as the case may be of such committee, duly called and

constituted in accordance with the provisions of these Articles. Such resolution maybe contained in one document or in several documents in like form each signed byone or more of the Directors or members of the committee concerned. A telexmessage or facsimile transmission or electronic mail sent by a Director or a memberof the committee shall be deemed to be a document signed by him for the purposesof this Article.


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POWER TO APPOINT ALTERNATE DIRECTOR

104. Any Director not resident in Pakistan or any Director who is resident in Pakistanand who is about to leave or is absent for a period of three months or more fromPakistan may with the approval of the Directors appoint any person who is eligibleunder Section 187 of the Companies Ordinance for appointment as a Director to bean Alternate Director during his absence from Pakistan and such appointment shall

have effect and such appointee, whilst he holds office as an Alternate Director, shallbe entitled to exercise in place of his appointer all the functions of his appointer as aDirector of the Exchange but he shall ipso facto vacate office as and when hisappointer returns to Pakistan or vacates office as a Director or removes theappointee from office. Any appointment or removal under this Article shall be

effected by notice in writing under the hand of the Director making the same. SuchAlternate Director may be one of the Directors of the Exchange. In such case he

shall be entitled to act in both capacities including right to vote on behalf of hisappointer in addition to his own right to vote. An Alternate Director need not hold

any share qualification.

COMMITTEE OF DIRECTORS

105. The Board may from time to time delegate all, or any of their powers not required tobe exercised at a meeting of the Board to a committee consisting of two or moreDirectors and any other persons as the Board thinks fit. Any committee so formedshall conform to any regulations that may be imposed upon it by the Board and shall

be governed, in the exercise of the powers so delegated, by the provisions hereincontained for regulating meetings and proceedings applicable to the Directors.

APPOINTMENT OF CHAIRMAN

106. Upon the first election by the Board, and thereafter upon each election of Directors,the Directors shall elect a Director who does not represent a TRE certificate Holderor its connected person as the Chairman of the Board and determine the period forwhich he is to hold office.

107. The offices of Chairman and the Chief Executive shall not be held by the sameperson.

APPOINTMENT OF CHIEF EXECUTIVE

108. Within fourteen (14) days from the date of an election of the Directors inaccordance with these Articles above or within fourteen (14) days from the date on

which office of the Chief Executive falls vacant for whatsoever reason, the Boardshall appoint any person who is not a TRE certificate holder and does not representa TRE certificate Holder or a connected person to be the Chief Executive of theExchange.

Provided that, the person so appointed shall not engage himself in anybusiness, profession or vocation directly or indirectly including trading or dealing in

shares and securities during the period he holds office and comply with the Fit andProper Criteria as prescribed by the Exchange with prior approval of theCommission.

Provided further that the appointment, removal and termination of the ChiefExecutive shall be made with the prior approval of the Commission and for this


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purpose the term removal and/or termination shall include non-renewal of hiscontract.

109. Upon the expiry of appointment under these Articles a Chief Executive shall beeligible for re-appointment.

110. The Chief Executive shall, if he is not already a Director of the Exchange, bedeemed to be its Director and be entitled to all the rights and privileges, and subjectto all the liabilities of the office of Director of the Exchange.

111. The Directors of the Exchange by a resolution passed by not less than three-fourths(3/4) of the total number of Directors for the time being, or the Exchange by way of

a Special Resolution, may remove a Chief Executive before the expiration of histerm of office notwithstanding anything contained (if any) in these Articles or in

any agreement between the Exchange and the Chief Executive.

112. The terms and conditions of appointment of the Chief Executive shall be determinedby the Board.

113. A Chief Executive shall receive, such remuneration as the Directors may determineand it may be made a term of his appointment that he be paid a pension and/orgratuity and/or other benefits on retirement from his office.

POWERS OF CHIEF EXECUTIVE

114. The Chief Executive shall have overall authority over and responsibility for themanagement of the affairs of the Exchange and the conduct, and the custody andmaintenance of its properties, assets, records and accounts subject to the directionand control of the Board.

115. The Board may also entrust to and confer upon Chief Executive any of the powersexercisable by the Board other than the powers which are required to becompulsorily exercised under the Act or the Companies Ordinance by the Board atits meeting upon such terms and conditions and with such restrictions as it maythink fit, and may from time to time revoke, withdraw, alter, vary all or any of suchpowers.

SECRETARY

116. Subject to the provisions of the Act:a. A Secretary may be appointed by the Board for such term, at such

remuneration and upon such conditions as it may think fit; and anySecretary so appointed may be removed by the Board; provided that theSecretary of the Exchange immediately prior to the Demutualization shallcontinue as Secretary of the Exchange upon Demutualization and subject to

the same terms and conditions.

b. A Director may be appointed as Secretary.

117. The Secretary shall send out all notices and agenda papers and attend all meetingsof the Exchange and of the Board, and, if necessary and provided that the Secretaryis the Secretary of such Committee, of Standing and other Committees, and shallcause proper minutes to be kept of the proceedings of all such meetings.


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118. The Secretary shall maintain or cause to be maintained such records and registers asrequired under Companies Ordinance.

LOCAL MANAGEMENT

119. The Directors may, from time to time, provide for the management and transactionof the affairs of the Exchange in or from any specified locality, whether in Pakistan

or elsewhere, in such manner as they think fit, and shall be without prejudice to thegeneral powers conferred by this Article.

120. The Directors may, at any time, and from time to time, by power of attorney underthe Seal, appoint any person to be the attorney of the Exchange for such purposes

and with such powers, authorities and discretions (not exceeding those vested in orexercisable by the Directors under these Articles) and for such period and subject to

such conditions as the Directors may from time to time think fit, and suchappointment may (if the Directors think fit) be made in favour of anybody

corporate, or of the members, directors, nominees or managers of anybody

corporate or unincorporate, or otherwise in favour of any fluctuating body ofpersons, whether nominated directly or indirectly by the Directors, and any suchpower of attorney may contain such powers for the protection or convenience ofpersons dealing with such attorney as the Directors may think fit and may alsoauthorise any such attorney to delegate all or any of the powers, authorities anddiscretions vested in him; and without prejudice to the generality of the foregoingany such power of attorney may authorise the attorney to institute, conduct, defend,

compound or abandon any legal proceedings by or against the Company, whethergenerally or any particular case.

121. Any such delegate or attorney as aforesaid may be authorised by the Directors tosub-delegate all or any of the powers, authorities or discretions for the time being

vested in him.

AUTHENTICATION OF DOCUMENTS

122. Any Director or the Secretary or any person appointed by the Directors for thepurpose shall have power to authenticate any documents affecting the constitutionof the Exchange and any resolutions passed by the Exchange or the Directors orany committee, and any books, records, documents and accounts relating to thebusiness of the Exchange, and to certify copies thereof or extracts therefrom as truecopies or extracts; and where any books, records, documents or accounts are

elsewhere than at the Office the local manager or other officer of the Exchangehaving the custody thereof shall be deemed to be a person appointed by the

Directors as aforesaid. A document purporting to be a copy of a resolution, or anextract from the minutes of a meeting, of the Exchange or of the Directors or anycommittee which is certified as aforesaid shall be conclusive evidence in favour ofall persons dealing with the Exchange upon the faith thereof that such resolutionhas been duly passed or, as the case may be, that any minute so extracted is a true

and accurate record of proceedings at a duly constituted meeting.

CUSTODY OF SEAL

123. The Board shall provide a common Seal for the purposes of the Exchange and forthe safe custody of the Seal, and the Seal shall not be used except by the authority ofthe Board or a Committee of Directors authorized by the Board itself.


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124. Every instrument to which the Seal shall be affixed shall be signed autographicallyin any of the following manners:

(i) by one Director and the secretary;

(ii) by two Directors; or

(iii) by a person duly authorized by the Board either generally or in relation tospecific instrument or instruments of specific description.

125. Notwithstanding the provisions of these Articles, the Board may resolve to dispensewith autographic signatures of all or any person referred to therein, in relation to

specific instruments or instruments of specified description and in substitution thereofto authorize signatures to be affixed by some method or system of mechanical or

electronic signature approved by the Board.

126. The Exchange may exercise the powers conferred by Section 213 of the CompaniesOrdinance with regard to having an official seal for use abroad, and such powersshall be vested in the Directors.

DIVIDEND

127. The Exchange in general meeting may declare dividends, but no such dividendsshall exceed the amount recommended by the Board.

INTERIM DIVIDEND

128. The Board may from time to time pay to the members such interim dividends asappearing to be justified by the profit of the Exchange.

DIVIDEND OUT OF PROFITS ONLY

129. No dividends shall be paid otherwise than out of profits of the year, or any otherundistributed profits of prior years and in the determination of the profit; availablefor dividends the Directors shall have regard to the provisions of the ordinance andin particular to the provision of Sections 83, 235 and 248 of the CompaniesOrdinance.

DISTRIBUTION OF DIVIDENDS

130. Subject to the rights of any persons entitled to shares with special rights as todividen

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